PoS business: How operators stay afloat amidst rising competition

A recent survey conducted by ThePressNG in Lagos, Abuja, and Port Harcourt sheds light on the thriving Point of Sale (PoS) business in Nigeria.

PoS agents, depending on location, earn between N5,000 and N12,000 daily.

This burgeoning industry, fueled by the simplicity of the technology, has created approximately 1.5 million jobs, surpassing the remuneration of many degree holders.

Operators attest to the profitability, with some earning as much as N360,000 monthly, outpacing salaries in traditional banking roles.

Several operators shared insights into their successful PoS businesses. Notably, strategic location selection plays a pivotal role.

Areas with high foot traffic, such as markets, universities, and commercial districts, prove lucrative. Offering additional services, like bill payments and money transfers, enhances customer attraction and retention.

Partnerships with other businesses and prioritizing exceptional customer service contribute to building a positive reputation in the competitive landscape.

To start a PoS business, obtaining a PoS machine is essential. The cost varies based on factors such as brand, quality, and features. Prices range from N50,000 to N200,000.

Some service providers offer free machines to agents, further reducing the entry barrier. This affordability contributes to the accessibility of the PoS business, making it an attractive venture for entrepreneurs.

An agent, Rose Ubong, told ThePressNG that effective marketing strategies, including location choice, customer service, and incentives, play a crucial role in attracting and retaining customers.

She added that overcoming challenges such as network issues, fraud, high commissions, competition, and regulatory compliance demands careful planning and continuous adaptation.

Starting a PoS business involves several key steps. Thorough research to understand industry dynamics, requirements, and challenges is crucial.

Raising start-up capital, choosing a prime location, and selecting a reliable PoS service provider are foundational steps. Registration with the chosen provider, advertising the business through various channels, and ensuring compliance with Central Bank of Nigeria (CBN) regulations complete the setup process.

The PoS business in Nigeria has experienced significant growth since the implementation of the agent banking system by the Central Bank of Nigeria in 2013.

As of July 2021, there were 986,252 registered PoS terminals in Nigeria, and the industry recorded N1.15 trillion in transactions by March 2023.

Globally, the PoS market is projected to grow from $80.8 billion in 2018 to $155.6 billion in 2028, showcasing its importance in the retail industry.

That is an indication that there is still a wide room for growth in Nigeria.

Moniepoint claims leadership in the market with over 600,000 agents, followed by OPay and Palmpay.

However, merchants have begun to overtake agents in the PoS market, with over 1.3 million merchants on the Moniepoint platform.

The market continues to thrive due to the convenience it offers in providing various financial services, from accepting payments to managing inventory.

There is no doubt that the PoS business in Nigeria presents a viable and lucrative opportunity for entrepreneurs. Its affordability, coupled with the potential for high daily earnings, positions it as a competitive alternative to traditional banking roles.

Success in this business hinges on strategic location selection, effective marketing, and adapting to industry dynamics.

As the PoS market continues to grow globally and in Nigeria, entrepreneurs entering this space should prioritize customer service, innovation, and compliance to ensure long-term success.

Five bankers interviewed by this medium revealed that most banks, in a bid to reduce overhead costs opt to engage staff on a contract basis.

With that arrangement, remuneration for contract tellers ranges from N60,000 to 120,000. On the other hand, remuneration for fully engaged staff among commercial banks ranges from N120,000 to N180,000.